Sublime Consulting

Jennifer from Canada asked a very interesting question in one of the websites I frequently visit.
She wanted to know if one were to get Inheritance Money, where and what should one invest in.

Jennifer needs to ask 3 questions to herself before investing .. why would she want to invest? What for? How Long?
By asking these questions :
1. She would get clarity on her goal or goals for investing
2. She would get to know the time horizon for investing in each of her goals.

The next step forward for Jennifer would be to look at her risk profile and accordingly plan her asset allocation. That is, how much of her investments should be in equity, debt, realty and cash. Once the asset allocation is through, she could get down to security selection. That is what product mix or portfolio to be constructed for each of her goal. Say for example, if she is planning to buy a house in the next 1 year or so..its better to put all of her allocated money for the goal into debt product which invests in treasury bills or government securities. Because she needs the money back to buy that house..

If you have questions like Jennifer has, please feel free to write in to me.. I would be happy to answer your questions..

Note : I had recommended Treasury Bills or Government Securities for the example we had taken, based on the context of the Country, Jennifer lives in - Canada and also factoring in the current global financial crisis that has roiled the markets, specifically the corporate debt market and money market funds[thanks to sub prime market crisis and CDO blow ups]. Case in point is couple of BNP Paribas Funds which went bust [funds that invested in the short term corporate debt] recently in U.S. and also the run on Northern Rock of U.K. [ last week depositors withdrew more than $ 3 Billion of deposits from the Morgage Lender]